Maharashtra government tweaks norms to allow townships on failed SEZs

Development on these lands will, however, be subject to environment and forest norms

Special Economic Zones (SEZ) that have failed to take off in the state can now be converted into integrated townships spread over minimum 100 acres.

The state has 48 notified SEZs, of which only 26 are functional. (HT File)

The state government’s revised rules to set up integrated townships issued last week allows not just unutilised land under notified SEZs, but also land falling within the buffer zones of national parks, under environmentally sensitive zones, under afforestation zones and owned by tribals (post approval from the government), to be included in the ambit of these projects.

The development on these lands will, however, be subject to environment and forest norms.

Land under a notified SEZ can be converted into an integrated township once it is denotified as an export enclave by the Ministry of Commerce. The new rules also dilute the condition of contiguous land for such a project, if the total land parcel of a developer is more than 200 hectares or 494 acres. In such a case, the project can be segregated as long as every parcel is more than 100 acres and within a 5-km radius.

The state urban development department’s notification issued on February 17, states that the modification is a bid to “utilise the maximum development potential of land, to increase the supply of affordable houses in the market, to develop smart townships through privatisation without any expenditure to the government’s.’’

But beyond this promised objective, the revised modification is likely to give a leg up to failed SEZ projects, especially on the outskirts of cities where developers had acquired land, but could not convert them into functional export enclaves because of opposition from farmers or changes in tax regimes.

The state has 48 notified SEZs, of which only 26 are functional. Nearly, 20,000 hectares of land acquired for SEZs remains unutilised.

“While the policy is being given priority to promote NDA government’s Housing For All promise and creating smart townships, the question is whether such residential enclaves can be successful without corresponding growth in industry or growth centres in the area. Maximum townships will get built around the proposed Navi Mumbai airport where the land has long been brought or under proposed SEZs,” said a senior bureaucrat, who did not want to be named.

The new norms have also reduced the premium to be paid for building such a project in industrial, agricultural, afforestation zone from earlier 15 to 20% to 5 to 10%.

This revised notification to the integrated township project comes a little over a year after the Fadnavis-led government issued the policy in December 2016.

The BJP government had modified the original policy approved in 2004 that envisaged setting up of large planned townships integrated with civic amenities and infrastructure on the outskirts of metros and within the regional plans of the metropolitan areas.

The 2004 policy had not found too many takers. This government tweaked the policy to offer higher incentive Floor Space Index (FSI) in the range of 1.7 to 2, allow development in non development zone, agriculture lands to make these townships more feasible.

Nearly 20% the project or total FSI utilised for residential purposes is to be kept aside for social housing, which includes homes for low income, economically weaker sections besides give a per cent for rental homes.

The developer will be granted 10 years to complete the project and build the requisite infrastructure including roads, sewage, water supply, social infrastructure like schools, market, hospital within the area.

The revised norms were approved in the state cabinet meeting last week. The cabinet also approved tweaking of rules for the integrated industrial areas (IIA) in the state, reducing the mandatory are under this from 40 hectares to 20 hectares. In IIA, 60% land is to developed for industry and 40% for commercial and residential.